Ohio

Beck Energy | Energy Companies | Industrywide Issues | Litigation | Ohio | Regulation | Statewide OH | Summit County

OH Supreme Court Strikes Down Home Rule in Gas Drilling Case
February 18, 2015February 18, 2015

Cases before the high courts of both New York and Pennsylvania in the past year have ruled that local municipalities can control oil and gas drilling within their borders–so-called “home rule” statutes. In the case of NY the high court went berserk and said towns can actually ban such drilling, which of course strips away private property rights guaranteed under the U.S. Constitution. In PA it was a little better, but not much. PA’s high court gutted provisions in the state’s Act 13 law making for a crazy-quilt patchwork of local zoning regulations that PA’s drillers must now navigate through. One state’s high court, however, has gotten it right. Yesterday the Ohio Supreme Court issued its long awaited ruling in the Munroe Falls v Beck Energy case (for background, see Beck Energy & Munroe Falls Go to Court – Again). In a 4-3 ruling, the OH Supremes said the City of Munroe Falls cannot stop Beck Energy from drilling a well that was properly permitted by the Ohio Dept. of Natural Resources (ODNR)…
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Industrywide Issues | Ohio | Statewide OH | Taxation

OH Gov Kasich Says Utica Shale Industry Making State “Poorer”
February 16, 2015February 16, 2015

The only question that remains (for us) about Ohio Gov. John Kasich is this: When does he plan to change the (R) after his name to a (D)? He is, in almost all respects, a liberal Democrat at this point. What other conclusion can you draw after he made this statement last week when referring to oil and gas drillers and the incredibly high severance tax he’s proposing: “Every time you take valuable things out of the ground you make us poorer.” This is a typical Democrat class warfare argument he’s using to justify his high tax proposal (see OH Gov. Kasich Increases Proposed Severance Tax Rate by 236%). Kasich and his lackies keep harping on “out of state” (i.e. “foreign”) companies, as if they are robbing the state blind and absconding with Ohio’s money in the dead of night. The reverse is true. Those “foreign” companies are providing jobs and tax revenue like crazy to the state. But let’s not destroy Kasich’s tax fiction with a dose of non-fiction reality. Last week John “foreigner hunter” Kasich went on the offensive against the oil and gas industry in his state. Yes, he’s declared war…
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Ohio | Statewide OH | Utica Shale

Ohio Utica Shale Just Keeps Chugging Along – Issues Permit No. 1799
February 16, 2015February 16, 2015

The Ohio Utica Shale is a quiet engine that just keeps chugging along. Yes, companies are cutting their capital expenditure budgets–some by a lot–but you wouldn’t know that based on the number of permits being issued for Utica Shale wells. As of Feb 7, Ohio has issued 1,799 permits for Utica Shale wells. Of those, 1,348 wells have been drilled and 740 wells are online and producing. Below is the latest updated ODNR map showing where the permits/drilled/producing wells are located…
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Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

OH Court: Developing Shallow Wells Enough to Hold Utica Layer
February 16, 2015February 16, 2015

An important Ohio Appellate Court case was recently decided in Ohio relating to Utica Shale lease rights. The case is called Marshall v Beekay Company. Beekay Company had drilled shallow, non-shale wells on the property of Gary and Cora Marshall. At some point along the way, Beekay had separated the deeper mineral rights (shale) from the shallower mineral rights. The landowners said because Beekay didn’t develop the deeper mineral rights by drilling in the deeper layers, they had broken the original contract. The upshot was the landowners hoped to lease the lower layer to someone who would develop it. But the court found that development and continuous extraction of gas from the shallow layer effectively holds the rights to the deeper layer. That is, the court shot down the request by the landowners to force development of the shale layer…
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Earthquakes | Industrywide Issues | Ohio | Research | Statewide OH | Statewide WV | Wastewater | West Virginia

EPA Sees Connection Between Some Injection Wells & Earthquakes
February 13, 2015February 13, 2015

On February 5th the Underground Injection Control National Technical Workgroup, part of the federal Environmental Protection Agency, released their final report on a potential link between wastewater injection wells (called Class II wells) and earthquakes. To which we say, we knew a probable connection existed three plus years ago. That’s the typical lag you get with when the federal government “investigates” something. The report is titled “Minimizing and Managing Potential Impacts of Injection-Induced Seismicity from Class II Disposal Wells: Practical Approaches” (the full 415-page copy is embedded below). The report says, in essence, while they can’t prove there’s connection between injection wells in some locations and earthquakes, the relationship is “undeniable.” MDN’s comment: What everyone acknowledges is that when you inject fluid into the earth over an active fault line, that fluid acts like grease and eventually the rock layers can, in RARE circumstances, slip and slide, causing a LOW LEVEL earthquake–typically so light no one feels it at the surface. The EPA study was based on cases from four states, two of them (OH & WV) in the Marcellus/Utica region…
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Columbiana County | Industrywide Issues | Ohio | Pipelines

Man Bites Dog: No Protesters at NEXUS Gas Pipeline Event?!
February 11, 2015February 11, 2015

The reporting on a story about a pipeline open house is so unusual, we thought you would like to hear about it. It seems that representatives from the proposed $2 billion NEXUS Gas Pipeline, a pipeline beginning in Columbiana County, OH, then crossing through 11 Ohio counties and 3 Michigan counties in total, held an open house to discuss the project last night in Hanoverton (Columbiana County), OH. The unusual “man bites dog” news? No nutty protesters, and those who attended, the people whose land it may cross, “welcome” the project! This is not your typical news reporting folks. Somebody in anti-drilling land is falling down on the job–they should have had at least one nutjob anti-fossil fuel protester outside for the cameras…
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Columbiana County | Energy Companies | Hilcorp Energy | Lawrence County | Mahoning County | Mercer County | Ohio | Pennsylvania | Trumbull County | Utica Shale

Full Speed Ahead for Hilcorp in the Northern Utica in 2015
February 10, 2015February 10, 2015

In 2014 Hilcorp spent some $400 million on drilling in the *northern* Utica Shale play–an area that virtually everyone else has abandoned for the more alluring wet gas to be found in the southeaster portion of the play. According to Hilcorp, they are enjoying success in the northern Utica and that’s where they will continue to focus their efforts…
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Devon Energy | Energy Companies | Guernsey County | Ohio | Utica Shale | Wayne County (OH)

Devon Puts 2 Utica Wells Up for Sale, Not Happy with OH Utica
February 10, 2015February 10, 2015

Devon Energy has put Wayne County, OH’s lone Utica shale well up for sale, along with another Utica well they own in Guernsey County. To which we say we were surprised. We had forgotten Devon had drilled (or owned) any Utica wells in the first place. Perhaps the reason they’re dumping the Wayne County well, which the say has “future utility,” is because it hasn’t produced a thing–oil or natural gas. The well in Guernsey also appears to be a bust. Here’s the brief blurb we caught on Devon exiting the Utica…
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Energy Services | Harrison County | Industrywide Issues | Marathon Petroleum | Ohio | Pipelines | Statewide OH

Marathon Announces Open Season on New Wet Gas Pipelines
February 10, 2015February 10, 2015

Marathon Pipe Line and Ohio River Pipeline, both subsidiaries of Marathon Petroleum Corp., announced binding open seasons on two new pipeline projects in Ohio and beyond. The first is called Cornerstone Pipeline is a 16-inch pipeline for condensate, natural gasoline, diluent and butaine (NGLs) that will begin in Harrison County, OH and run for about 50 miles to Marathon’s refinery in Canton, OH. Along the way it has the potential to connect various processing facilities. The second project is something they’re calling the Utica Build-Out Projects–a pipeline or pipelines that will carry product beyond Canton to other Midwest refineries, reaching Chicago and even into Canada…
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Belmont County | Energy Companies | Energy Services | Industrywide Issues | Jobs | Monroe County | Ohio | Pipelines | Rice Energy | Rice Midstream

Rice Midstream Building New “Zeus” Pipeline in Belmont/Monroe OH
February 10, 2015February 10, 2015

MDN picked up on a bit of news we had not previously heard about. Rice Midstream, the newly formed subsidiary of Rice Energy launched in December (see Rice Midstream IPO Falls Short of Goal by Approx. $134M), is busy at work. They are building eight miles of 30-inch pipeline through portions of Belmont and Monroe counties (in Ohio) as part of their “Zeus” project. This is the first time we’d heard of Zeus (the pipeline). The project will last four months and employ 350 temporary union workers–welders and construction workers…
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Energy Services | Industrywide Issues | Jobs | Mahoning County | Ohio | Supply Chain | Vallourec

Vallourec Star Pipeline Plant in OH Shutting Down for 3 Weeks
February 10, 2015February 10, 2015

Vallourec Star, a steel pipe manufacturer in Youngstown, OH, has had more business than it knows what to do with since it opened in 2012. That is, until recently. With the plunging price of oil and gas comes scaled back budgets for drilling in 2015. Vallourec Star has been experiencing a slow down. In anticipation of even more slowing down, they’ve announced a three week shut down of the plant, meaning hundreds of families will have a big hole in their family budgets. For those that can do without a paycheck for a while, the company is also offering a 6-month voluntary layoff, which signals they think the “slow down” may be with us for while…
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Energy Companies | EQT Corp | Ohio | Statewide OH | Utica Shale

EQT Shutters OH Utica Drilling, Still Likes PA/WV Utica Drilling
February 9, 2015February 9, 2015

On an earnings call with analysts last Thursday, EQT’s top management said that they are “writing off” their Ohio Utica Shale acreage, taking a $162 million hit. The acreage performed “significantly below expectations.” However, that doesn’t mean EQT is giving up on the Utica–just their Utica acreage in Ohio. EQT owns a LOT of acreage in southwest Pennsylvania and West Virginia (over 400,000 acres) with dry gas Utica under much of it–and they’re eyeing the Utica in those locations very closely. EQT is in the midst of drilling two dry gas Utica test wells–one in Greene County, PA, the other in Wetzel County, WV…
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Guernsey County | Industrywide Issues | Ohio | Statewide OH | Supply Chain | Utica Shale

Small Fracking Co Leaving OH Utica, Heading South of the Border
February 9, 2015February 9, 2015

It hardly seems worth mentioning, but we will anyway. Oilfield services company GoFrac LLC once had great hopes for the Utica Shale. GoFrac does frack jobs. Think of the company as a very (very) small Halliburton or Schlumberger. The company is based in Texas but a few years ago bought 90 acres in Cambridge (Guernsey County), OH with high hopes of hiring 250 people to work in the fracking fields of the Ohio Utica. No more. The company is closing up whatever presence they have had and leaving the northeast. Apparently, from their website (with a copyright of 2012 on it), they plan to go frack in Central and South America instead…
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Coshocton County | Industrywide Issues | Ohio | Statewide OH | Wastewater

Coshocton County, OH #1 in Frack Wastewater Injection Volume
February 9, 2015February 9, 2015

The amount of wastewater, both flowback and brine going down Ohio’s injection wells increased by a full third (35% actually) in 2014, according to research by Bob Downing at the Akron Beacon Journal. Wastewater in-state (produced in Ohio) jumped 32% while wastewater from out of state (Pennsylvania and West Virginia) jumped 37% in 2014. Here’s some statistics…
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Blue Ridge Mtn Res/Magnum Hunter | Energy Companies | Energy Services | GreenHunter Resources | Industrywide Issues | Meigs County | Ohio | Regulation | Ritchie County | Wastewater | West Virginia

US Coast Guard Approves Brine Shipping via Barge on Ohio River
February 4, 2015February 4, 2015

Some big news coming from GreenHunter Resources, the wastewater disposal arm of MagnumHunter Resources. As MDN has chronicled for the past several years, MagnumHunter has been trying to secure a permit from the U.S. Coast Guard to transport frack wastewater via barges down the Ohio River. The Coast Guard floated a preliminary plan to allow it all the way back in November 2013 (see More on Coast Guard Plan to Allow Barging of Frack Wastewater). However, until now, they have withheld permission due to meddling by The White House and other federal agencies. According to a conference call last week, MagnumHunter/GreenHunter officials said the Coast Guard “quietly” granted permission in December to allow them to begin barge shipments down the Ohio River. The permission apparently applies only to brine, or “produced water” and not flowback for frack wastewater…
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Industrywide Issues | Ohio | Statewide OH | Taxation

OH Gov. Kasich Increases Proposed Severance Tax Rate by 236%
February 3, 2015February 3, 2015

It now appears Ohio Gov. John Kasich (RINO), wants to completely kill Utica Shale drilling. On Monday he released his latest budget and his severance tax proposal has gone from his previously preferred rate of 2.75% to an astonishing 6.5%–a 236% increase. Yes, you read that right–it’s not a typo. Over the past several years, Kasich has squabbled with his own Republican legislature over how much of (not if) an increase there should be. The legislature proposed 2.25% as a new severance tax rate, Kasich wanted 2.75%. Eventually the legislature proposed a compromise at 2.5% (see OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!). Kasich dearly wanted that extra 0.25% and held out, losing the battle. There was no increase passed. Kasich, whom we refer to as “the foreigner hunter” for his jingoistic disdain for “foreign” oil and gas workers from exotic places like Texas and Oklahoma, has just upped the ante considerably with a proposed 6.5% severance tax. Did Ohio just become Colorado and is Kasich now smoking pot?…
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